Water World sells three products: ski vests, slalom skis, and ski ropes. Information related to each product line is provided as follows.

The company’s annual fixed costs are approximately $741,000.

a. Compute total annual sales that the company must generate to break even. (Hint: Determine the contribution margin ratio for each product.)
b. Compute total annual sales that the company must generate to earn operating income of $234,000.
c. As Water World’s marketing manager, what marketing strategy would you pursue to help the company maximize its profit potential?

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Unit selling price... Unit variable cost Sales mix percentage Ski Vests $120 60 20% Slalom Skis $300 210 70% Ski Ropes $50 10 10%